B.C. small business owners struggle against inflation, giant competitors — and a looming loan deadline

Tamara Nowakowsky isn't afraid to admit her dream retail business is close to sinking.

The owner of North Vancouver's Delish General Store can barely afford to restock her boutique's refillable bulk soaps, locally made gifts and housewares.

She says after paying staff and suppliers and dealing with rising rents, there's simply nothing left.

"I'm in very deep and I'm not sure I can pull the nose up," she told CBC News, as tears welled up in her eyes. "I don't even know if I can articulate adequately the stress that the last few years has brought  ... COVID started and things kind of took a turn."

She says even loyal customers are tightening their belts.

"People are nervous and buckling down on purchases," she said. "There's a lot of rumblings in the market."

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High inflation is raising costs not only for shoppers, but also for businesses that are already running with tight margins after the pandemic. 

But inflation and lost customers aren't the only things making Nowakowsky lose sleep. Now a looming federal deadline has many small businesses in a panic too.

She has four months to repay the federal loans that kept her shop afloat through the pandemic.

She said she owes Ottawa $52,000 in pandemic loans received through the Canada Emergency Business Account (CEBA) program and has to pay them back by Dec. 31. Tens of thousands of B.C. businesses like hers have yet to repay.

If businesses miss the deadline, they will lose access to the partial loan forgiveness being offered and their loans will start accruing five per cent interest.

'Really important to the community'

Last year, Ottawa extended the repayment deadline to the end of 2023, but the Canadian Federation of Independent Business (CFIB) is calling on Ottawa to push back the date once again until entrepreneurs are back on their feet — and inflation is less of a threat.

"When we talk about things like extending the CEBA loan deadline, these are the type of businesses we're looking to save," said CFIB vice-president Ryan Mallough.

"Coming off the last few years, and how the hit they've taken has been … it's really important to the community that these small businesses survive."

Ottawa said the program was a temporary measure to help businesses weather the pandemic, and the repayment deadlines were clear and already extended once.

"Repaying the balance of the loan on or before Dec. 31, 2023, will result in loan forgiveness of up to 33 per cent," the federal government states, up to $20,000 per borrower. "All applicants that received funding through the CEBA program are required to repay their loan."

Nowakowsky now wonders if she "should have just shut down" earlier, instead of getting "further and further in debt."

Canadians unaware of small businesses' impact

According to the CFIB, nearly one in five small businesses in Canada — or nearly 250,000 — could shut down next year without an extension on the repayment of their CEBA loans. As of July, just 19 per cent of small businesses in B.C. who received the CEBA loan had repaid it, the organization said.

The group's data suggests small retailers pump six times more of their earnings into the local community than large multinational corporations. 

But a new Angus Reid Group opinion poll commissioned by the CFIB found most Canadians don't realize there's a big difference between large and small stores.

Asked how much of every dollar shoppers spend actually goes back to the local community, the survey found that Canadians on average believe both large chains and small stores equally contribute 38 cents of every dollar they earn to the local community. British Columbian respondents held the same perception.

According to CFIB data, 66 cents of every dollar spent at a small business stay in the local community, six times more than multinational outlets.

The Angus Reid Group conducted the poll from July 13-19, using an online panel of 1,504 Canadian adults weighted by region and demographics, including 189 British Columbians. The margin of error nationally would be equivalent to 2.5 per cent, 19 times out of 20.

'So stressful right now'

Nowakowsky said the findings of both community impacts and shoppers' perceptions match her experience "100 per cent."

But she said if shoppers want small businesses — and the community benefits they offer — to survive, now is the time to buy local.

"All our costs have gone up, and sales are down at least 45 per cent this year over last year," she said. "I have to make some really tough decisions with the few meagre dollars that I have.

"This is all so stressful right now to right this ship at the business … If I have to shut down, it'll break my heart."